HR Strategy

A Protest for Change: What’s to Be Expected for Franchises?

By

Courtney Thurman

| Oct 27, 2014

If you’re like me, you thoroughly enjoy pressing the fast-forward button on your DVR each time commercials attempt to interrupt your favorite TV show. However, when you’re stuck watching a live program, there is no escaping the advertisements, which include everything from your local car dealer looking to unload hail-damaged inventory to the huge fast-food chain trying to let you know that the rib sandwich is back!

Most of the time, consumers can tune the commercials out by crushing candies on mobile devices – or perhaps by watching paint dry – but next time you see that fast-food chain advertising that game you play by collecting pieces to win a million dollars, listen for the disclaimer phrase “at participating locations.”

This means the business is franchise-owned; the franchisee pays a sum of money to the food chain to have the privilege of putting its name and brand on a building that meets its exact standards. Franchises have standard regulations, including but not limited to rules for hiring employees, the uniforms they wear and what they say while manning the drive-thru lane. However, franchises do not have a regulation regarding standard pay for employees across the nation, despite working for the same chain.

The National Labor Relations Board’s (NLRB) current legal case began over a dispute from employees of the fast-food industry who felt their wages were too low for the jobs they were performing, so they protested. This protest led some franchisees to terminate those employees, and it didn’t take long for the unions to jump in and escalate the issue. If passed, the case could have significant impact on franchises, perhaps forcing a change in the way they currently conduct business. Instead of only regulating menu items and promotional signage, corporate franchise owned businesses soon could be in control of all aspects of the business, making corporate and franchises joint employers.

As a joint employer, corporate would havemore authority within the franchises. In layman’s terms, this means that the small-business duties a franchisee oversees – like regulating wages, hiring/firing and employee schedule maintenance – soon could be taken out of their hands alone and shared with corporate equally.

Along with joint-employer status changing these day-to-day aspects, it also would open the door for unions to step into the franchise industry. With the arrival of more unions into the franchise world would come union dues for employees. These dues go toward legal aid, health care and many other supporting activities that the union provides, but most employees will never utilize. Employees could choose to decline the union, yet still would have to pay dues for doing so.

By joining forces with the unions, the employees may be able to achieve their goal of increased pay … but it will come with a price – one paid not just by them, but everyone in the franchise industry. Hotels, convenience stores and other businesses that have a quick-service restaurant attached to them would be affected as well; although their employees may not identify with the fast-food workers who decided to protest, they operate under the same franchise structure, and thus, would have to pay dues to a union they may not want or need.

By the end of December, the NLRB is expected to make a decision before current president Nancy Schiffer’s term ends. If it rules in favor of the unions and joint employers, it most likely will be appealed, possibly all the way up to the U.S. Supreme Court.

For now, the best advice for franchisors, franchisees and employees alike is to stay on top of the updates of the case and fully understand the policies that soon could become a reality.

About the Author

Courtney Thurman

Courtney Thurman is a recent graduate of University of Central Oklahoma with a degree in marketing. She joined the Paycom family in August and is currently responsible for lead generation and maintenance of the company’s sales database. In her spare time Thurman enjoys spoiling her two dogs, Howard and Peaches, and her nephew, Mac.

See more posts by Courtney Thurman